At Salad Money we pride ourselves on our “More Than Your Score” lending system which have no impact on credit score in any way. However, unfortunately in many other aspects of our life, the historical credit score scheme remains and can have a huge impact on your life. Credit building can not only make it easier for you to borrow money in trying times but also help maintain your financial health.
With an improved credit score, you can also acquire a number of benefits such as lower interest rates, easy credit, and saving opportunities.
However, not building credit can lead to weak financial health, a lack of credit score and thus, an untrustworthy financial status. Therefore, if you’re looking to build your finances, building your credit score with the help of credit cards, personal loans, and other forms of credit can be incredibly helpful.
In this article, we give you a few simple tips for credit building that can greatly help your credit score and your financial health over the long term.
Try Not to Over-Apply for Credit
If you’re wondering, “How do I build credit?” here’s where it starts. Whilst there are always reasons to apply for credit, you need to make sure you don’t do it more often than you need or with many lenders at once.
Doing so may lead to the lenders questioning your credit history and your financial health. Moreover, if you get more rejections, it may affect your other applications.
Before you apply for a loan or other kind of credit, it’s important to consider the interest rates, benefits, and disadvantages. Ensure that you apply for the ones that can provide you with the maximum value for your situation.
Try Not to Avoid Credit Altogether
When it comes to building credit, most people absolutely avoid it altogether in order to “play it safe”. However, this can be worse because when you may need to borrow, you won’t have any credit history to draw on.
When lenders receive applications for credit, they will often start by looking at a person’s previous lending history and how they’ve managed their money.
However, if you’ve never taken a loan, this means there’s no history for lenders to look at, meaning that you’re potentially a higher risk investment to lenders. Therefore, you need to build your credit using small loans or use the best credit cards to build credit and create a strong financial history.
Keep an Eye on Your Credit Score
It can be stressful and another thing to keep you up at night, but practice regularly checking your credit score to spot discrepancies. If you have a healthy relationship with money, then all should be well with your credit score, but if you’re borrowing more than you’d like, this may mean some additional attention is required.
Whilst building credit it is important to keep an eye out for minor or major mistakes. If your credit score has suddenly dropped during one of your routine checks, you need to figure out why and try to fix it.
This can also protect you from credit fraud which can affect your financial health in the long term. The earlier you spot the problem, the easier it is to get out of it.
Make Your Repayments on Time
We can’t stress this enough, when it comes to debt, repaying on time is usually the most important factor for future financial security. Your repayment history is considered incredibly important to most lenders and credit rating agencies.
Being late by even a day can affect your credit score and harm your potential to borrow in the future. And while missing once or twice might not be as severe, a pattern of late repayments can tank your credit rating.
Remember to be on time with your payments and try to set up auto-payments. Furthermore, you could also make it a rule to make all your repayments before you begin spending on your personal expenses.
Choose Salad Money for Affordable Personal Loans
Now that you know all about building credit and improving your credit score, it’s time you put these ideas into practice.
While a good credit score may not get you all the credit you want, it certainly opens up more opportunities. Moreover, if you’ve been wronged by an unfair credit score system, you can always opt for our “More than your score” loans.
Our loans are quick personal loans created for workers who we believe should be defined by more than just their credit scores.
With a fair system to analyse your loan affordability, we aim to provide unbiased and affordable loans to all those in need. With Salad Money, you can always get help when you need it the most.